Steven Mnuchin is thought a possible pick for Treasury secretary. Mnuchin and his then-wife Heather arrive at The Kaleidoscope Ball's "Designing The Future" at the Beverly Hills Hotel on April 17, 2013, in Beverly Hills, Calif. Richard ShotwellInvision/AP

Steven Mnuchin is thought a possible pick for Treasury secretary. Mnuchin and his then-wife Heather arrive at The Kaleidoscope Ball's "Designing The Future" at the Beverly Hills Hotel on April 17, 2013, in Beverly Hills, Calif. Richard ShotwellInvision/AP

If Donald Trump nominates campaign finance chairman Steven Mnuchin to head the Treasury Department, he’s sure to get a fight from advocacy groups that think the banker exacerbated the foreclosure crisis in California.

“It’s very troubling to think of basically a foreclosure kingpin running our Treasury Department,” said Joseph Ridout, manager of consumer services for the San Francisco-based advocacy group Consumer Action.

Mnuchin is a former Goldman Sachs banker and hedge-fund mogul. He led a group of powerful investors in 2009 that purchased the assets of failed lender IndyMac Bank, which had specialized in loans to weaker borrowers and was taken over by the government during the financial crisis. As part of the deal, the government agreed to absorb some of the potential losses.

From the ashes of IndyMac came OneWest Bank, based in Pasadena, California. It was owned by a holding company led by Mnuchin and composed of hedge fund giants. They included billionaire George Soros and John Paulson, who famously made billions betting on the collapse of housing finance. They were part of the plot of the book and movie “The Big Short.”

Just four years later, they all roughly doubled their investments when it was announced that New York-based CIT Group would purchase OneWest Bank for $3.4 billion. Mnuchin sits on the CIT board of directors.

We will hold him accountable if he abandons his call for real change and instead favors the powerful special interests he lambasted on the campaign trail.

The left-leaning advocacy group Allied Progress, on possible Wall Street picks for a Trump administration

The merger galvanized housing advocacy groups, who unsuccessfully lobbied federal regulators to prevent it or at least to demand more fairness from OneWest Bank in its foreclosures. Advocates argued to regulators that the bank’s foreclosures across California, especially around Sacramento and Los Angeles, disproportionately had been brought against Hispanics, African-Americans and the elderly.

During that debate, Mnuchin’s company took the unusual step of starting an online form letter in order to pressure Fed Chair Janet Yellen to accept the merger without a public hearing. CIT Group was run at the time by John Thain, who was villainized during the financial crisis of 2008-09 and resigned after losses and criticism of his excessesas CEO of Merrill Lynch, which was later acquired by Bank of America. Thain’s excesses included a $1.2 million remodeling of his office that featured a $35,000 toilet.

What riled consumer and housing advocates is how OneWest Bank and its payment-collecting affiliate Financial Freedom lagged competitors in finding ways to keep minorities and the elderly from losing their homes during and after the U.S. financial crisis. It foreclosed on more than 36,000 homeowners before its sale to CIT Group, they said

“We found that bank to be highly problematic . . . and one of the most troubling mergers we’ve seen,” said Kevin Stein, deputy director of the California Reinvestment Coalition, a San Francisco-based consumer advocacy group. “Mr. Mnuchin and his colleagues are big names in finance, and happen to be among the most wealthy individuals in the country.”

The coalition studied whether OneWest Bank made credit available to and reinvested in lower- and moderate-income communities, and “by our metric we find that bank to be particularly poor in reinvesting in those communities.”

It guarantees that Mnuchin will face some tough questions from Congress during any nomination hearings.

“His position of leadership, just like (Wells Fargo CEO) John Stumpf’s position of leadership, makes him accountable,” said Ridout of Consumer Action, referencing the recent scandal over fake customer accounts that Wells Fargo created to get internal bonuses. The OneWest Bank foreclosures “were certainly brought to his attention.”

Treasury nominees are often scrutinized for their ties to banking and Wall Street. The current secretary, Jacob Lew, faced criticism from Republicans for his tries to Citigroup.

Since the coalition is nonpartisan, it refrains from endorsing or opposing nominees. But Stein said that didn’t prevent it from raising concerns about OneWest Bank and its former owners.

“From our standpoint, that is a financial institution that did not make credit available in all communities and in fact did harm,” said Stein.

CIT Group did not immediately respond to a request for comment about the allegations. But during the merger process, the bank denied those accusations.

Mnuchin is a 17-year veteran of Wall Street powerhouse Goldman Sachs, where his father had served on the management committee. He left in 2002 and founded a hedge fund called Dune Capital Management. He also sits on the board of directors of retailing giant Sears Holding Corp. He had two companies that were involved in providing capital for movies such as the “X-Men” franchise and “Avatar.”

EDITORS: STORY CAN END HERE

Among other possible Treasury picks are House Financial Services Committee Chairman Jeb Hensarling, a Dallas-area Republican, corporate raider Carl Icahn and former General Electric CEO Jack Welch. Also mentioned is Trump friend Lawrence Kudlow. He’s a Reagan-era budget official who became a Wall Street star until a $10,000-a-month cocaine habit wrecked his career in 1994. He later reinvented himself as a commentator on the CNBC business channel, and Trump often cites Kudlow when pitching his tax plans.

“The senior Cabinet officers, some of them are going to look different than what we’re used to,” cautioned Michael Strain, the director of economic policy studies at the American Enterprise Institute, a conservative think tank.

Trump has given no timetables for his selection process, but he has released details of his transition team. The head of the transition team for finance and banking is David Malpass, a Reagan-era official who went on to become chief economist for failed investment bank Bear Stearns. Its spectacular collapse unleashed the financial crisis in 2008. Afterward, Malpass founded Encima Global, an economic research firm that includes several former Bear Stearns analysts.

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